It is often said that housing prices always go up, and that you can be very sure of making money if you buy your own home. This has been the case for many years recently, but as in most assumptions, there are also exceptions to take into account and parameters to consider that mean that not everything is completely black and white.
Nordea’s (now Swedbank’s) chief analyst, Andreas Wallström, shared a graph below on Twitter a while ago. It shows inflation-adjusted house prices in Stockholm over a period of just over a hundred years.
You may not recognise the image of how it is spoken in the city, but you should also remember that inflation is not the only thing that matters when you look at the housing price, for example. The very concept of inflation is also complicated and debated. It can be briefly summarised in that you consume different types of things and also get other values of “the same product” in the product basket. 20 years ago your TV was thick and could show TV channels, today it hangs on the wall and has access to all the world’s songs, movies and news. It may cost a little more, but the question is whether you pay for the same thing.
If you look at this graph, you can see that during the 20th century in relation to inflation for some time there was a downward trend in Stockholm house prices.
What is relevant in time series of this length could be much more. Examples of such are general prosperity in the country, growth in the city, infrastructure development, immigration and relocation, interest rates, wage levels, public utility activity and other behavioural patterns. Statistics can always be seen from several different perspectives, but the important thing is that you understand what you see and look at more perspectives. It helps one to get as clear a bliss as possible.
Always absorbing information from so many perspectives benefits most of the time, investing is no exception. Find out all the perspectives in the current projects inside the platform to find your next investment opportunity!